Cambridge CSR

Health  & Safety, child & forced labour, even noise of construction site, selling high sugar promoting obesity, polluting water, land and air affecting people

Disproportionally affected are weaker and poorer people (indigenous, women, children, etc.) = THREAT OF MENACE 

Estimates around 40 million modern slaves, although 97% have anti-slavery laws, but only 51% have penal codes for slavery. Also in UK labour inspector once every 50 years.

High risk in supply chains (cleaning and distribution, primary agriculture and mining). 50% of slavery starts as a debt towards employer. 

1. UN Guiding Principles of HuRi (essentially role of governments)

2. OECD  Due Diligence guidance (governments and businesses/stakeholders)

3. International Finance Corporation Guidance (good practical implementation in terms of risk/mitigants, but also expectation of stakeholder engagement) and kind of benchmark for most ESG requirements. 

Legislation: Mandatory EU DD

SDG all have embedded social respons.

• Moral
• Litigation
• Reputation
• Boycot
• missed business opps
• missed investment opps (ESG)
• Talent acquisition
• Good working atmosphere -- > better results 
• more resilient partnerships

How go about it?

1) what are current labour/social issues in company/supply chain?

2) what are expectations of shareholders, behaviour of competitors, laws __> define our standards

3) Prioritize

Scope and Impact

Scale (how many people are affected)

Remediability 

ID and monitor proactively risks. 

Shared value = not optional = responsibility and opps for economic benefit not just for supply chain but also for community

How overcome ST thinking?

• abolish quarterly reporting
• nuture the core before you stimulate progress
• underinvestment in people
• think shares prosperity
• align compensation incentives
• Every brand has a "real life" Benefit
• Transormation to include all beyond co' and suppliers. 
• Create alliances (unilever with fridge makers)

My thoughts. Eocnomic system leaves too many people behind. But you must also be a well run co's to be a better world. Global co's must reconnect with communities and people away from shareholder primate.

Financial markets need clear, comprehensive, high-quality information on the impacts of climate change. This includes the risks and opportunities presented by rising temperatures, climate-related policy, and emerging technologies in our changing world.

The Financial Stability Board created the Task Force on Climate-related Financial Disclosures (TCFD) to improve and increase reporting of climate-related financial information.

Climate change poses both risks and opportunities for business, now and in the future.

Currently, however, investors, lenders, and insurers don’t have a clear view of which companies will endure or even flourish as the environment changes, regulations evolve, new technologies emerge, and customer behavior shifts — and which companies are likely to struggle.Without reliable climate-related financial information, financial markets cannot price climate-related risks and opportunities correctly and may potentially face a rocky transition to a low-carbon economy

The Financial Stability Board established the TCFD to develop recommendations for more effective climate-related disclosures that could promote more informed investment, credit, and insurance underwriting decisions and, in turn, enable stakeholders to understand better the concentrations of carbon-related assets in the financial sector and the financial system’s exposures to climate-related risks.

Circle from large to small:

Governance

Strategy

Risk management

Metrics and targets

Governance Strategy:  Disclose the organization’s governance around climate-related risks and opportunities. 

Stratety: Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy and financial planning where such information is material.

Risk Management:   Disclose how the organization identifies, assesses, and manages climate-related risks.

Metrics and Targets: Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material. Scope 1 and 2, if appropriate 3 of GHG

Yes!

In addition to the guidance for organizations in all sectors, supplemental guidance is available for the following groups and industries:

Financial Sector Industries • Banks • Insurance Companies • Asset Managers • Asset Owners

Non-Financial Groups • Energy • Transportation • Materials & Buildings • Agriculture, Food, and Forest Products

The financial sector was organized into four major industries largely based on activities performed. The activities are lending (banks), underwriting (insurance companies), asset management (asset managers), and investing (asset owners). The non-financial groups identified by the Task force account for the largest proportion of GHG emissions, energy usage and water usage.

$2.5 trillion fashion industry. expected to increase by 81% to 102 million tonnes by 2030 to $3.3 trillion. GHG to increase by 50% in this time. --> not sustainable. Move to post-growth? 

Fewer SKU? smaller collections? better quality? slow down fashion calendar?  reduce excessive production?

Increased efficiency lead to higher consumption. See more efficient cars but more oil consumption. Rebound effect because more is consumed. 

Effect >100%: -take back

Effect <100%: (actual consumption reduced, but less than expected)

Negative

increasing road capacity can make traffic congestion worse. 

New products and services often with greater economic and social value – at a lower cost using fewer natural and financial resources. The goal is not to create cheap offerings, but rather more effective offerings in terms of affordability, simplicity, quality and sustainability. 

smaller input / smaller waste

Doing Better With Less.

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one that emits no more carbon dioxide than it removes from the atmosphere by 2050, the scientifically-established threshold necessary to keep global warming well below 2ºC.

In addition, I believe TCFD should not just be adopted by public companies. If we want these disclosures to be truly effective – if we want to see true societal change – they should be embraced by large private companies as well.

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Science-based targets are those adopted by companies to reduce greenhouse gas emissions in line with what the latest climate science says is necessary to meet the goals of the Paris Agreement — to limit global warming to well-below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C.

“Stranded assets” are assets that have suffered from unanticipated or premature write-downs, devaluations, or conversion to liabilities (for example, oil and coal from divestment due to climate change considerations). This term could also apply to an asset that becomes obsolete or is no longer able to create value (for example equipment, buildings or degraded soil (in the case of an agricultural business).

Circle

Strategic

• Brand and reputation - key stakeholder relations
• Business Model and propositions
• Stranded assets

Operational

• Productivity and employee engagement
• Operational disruption
• Input price rises (price volatility) and regulatory compliance costs

Creating shared value is an example of an approach that seeks to connect social progress and business value. The purpose of shared value is for companies to find a way to turn social problems into business opportunities that help to solve these problems instead (Shared Value Initiative, 2016). Furthermore, it is about creating value for both the business (in the form of profits) and society (for example, through job creation, training and development initiatives). Shared value is not simply about “doing the right thing” by donating money to causes. It is a management strategy that aims to empower individuals and communities while simultaneously delivering on financial value for a business (Driffill, Hacking, & Styles, 2016)

built on trust between co and stakeholders

Shifting corporate responsibility

• move to integrated reporting
• think about societal impact on value

Shared value

• shift debate to a source of competitive advantage
• opps in addressing societal problem (also ST to LT)

philanthropy

CSR (manage risks)

Creating shared value (competitive advantage)

CSR has an element of transfer of money, e.g. in fair trade you pay a farmer a fair price (paying more for the same thing, which according to Porter is not sustainable). With CSV you are improving the farmer, so that he can produce more efficiently. 

3 Levels of shared value

1. Reconceive products and markets
2. Redefine productivity in value chains
3. Enable local cluster development

1. AIA: Incentivizing good behavior by giving rewards leading to lower mortality rates and therefore smaller death benefits to be paid

2. Nestle: Train and equip farmers as suppliers

3. talent pool of jointly trained youth to offset low supply of educated employees

If we are honest, we have been living with the ambiguity created by the debate on the value of CSV for a long time. In lecturing to business people, we tend to stress the business case of sustainability and the corporate benefits of their social engagements, be it in the form of efficiency gains, reputational benefits or stronger market positions, because we know this relates to the world that they live in. In discussions with our academic peers, however, we freely discuss the limitations and shortcomings of such win-win approaches. We are fully aware of this inherent ambiguity and yet we realise that they both have their own truths.

1. Unoriginal / repackaging of strategic CSR etc.

2. Ignores tension between social and economic goals  (ignore need of trade offs)

3. Naive about bus. compliance

4. Too narrow on island, not overall system. Cherry picking

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Clear business case

Proven model (to drive social case)

Internal champion to drive change

Businesses can gain long-term advantages by understanding such shifts and the opportunities they present. In past crises, companies that invested in innovation delivered superior growth and performance postcrisis. Organizations that maintained their innovation focus through the 2009 financial crisis, for example, emerged stronger, outperforming the market average by more than 30 percent and continuing to deliver accelerated growth over the subsequent three to five years